Rio Tinto chief attacks Canberra on taxes, laws

Peter Ker

RIO Tinto has accused the Australian government of taking its ''eye off the ball'' in terms of productivity reforms, and called for action on workplace laws, taxation and foreign workers.

Responding to accusations from Resources Minister Martin Ferguson that the local mining sector had become ''fat and lazy'' during the recent boom years, Rio's Australia chief David Peever said governments had to accept some blame for making Australia one of the most expensive places to operate.

Among a long list of complaints, Mr Peever said Australia's tax regime was not competitive globally and needed changes.

''Interventions like the recent increase in Queensland coal royalties and the more perverse aspects of the carbon tax, most notably the discriminatory inclusion of fugitive emissions from coal, will help strangle the sector if they are not addressed. Restoring investment certainty around the fiscal regime is an urgent imperative,'' he said.

Despite the Gillard government showing a willingness to negotiate foreign worker deals with the likes of Hancock Prospecting and Chevron, Mr Peever said the skills shortage was a long way from being resolved.

''This can be relieved by removing the speed bumps to domestic mobility and facilitating access to overseas labour where local labour is unavailable,'' he said.

Mr Peever also took aim at the length of time needed to win regulatory approvals, infrastructure delivery and Australia's workplace rules.

''Reform of the Fair Work Act needs to go much further than has so far been flagged by the government. Direct engagement between companies and employees, flexibility and the need for improved productivity has to be at the heart of the system,'' he said.

Despite broad job cuts across numerous divisions this year, Rio remains committed to expanding its iron ore exports from Western Australia to 353 million tonnes by 2015.